Big Banks Moving Branch Emphasis to High-Population Areas: Report

Big banks and super-regional financial institutions are focusing their branch openings in high-population density markets, and they are closing branches in low to moderate population markets, according to a new SNL report.

Nevertheless, some of the big bank and super-regionals continue to open branches in low to moderate population regions even though there have been more net branch closings since 2006, the report issued this week said.

“The only markets that saw an increase in the number of branches fell within areas of high population density (more than 6,500 persons per square mile) due in part to the years preceding recession,” the SNL report stated. “Starting with a base of 11,855 (branches) in 2006, these markets saw an increase of 9.34% from July 1, 2006, through June 30, 2013, with net openings of 1,107.”

Markets with low population density, less than 1,500 persons per square mile, saw more branches close than open with net closings of 47 branches since June 2006.

What’s more, markets with moderate population density of 1,500 to 6,500 persons per square mile had the highest amount of net closings at 795 branches in 2013.

“While some banks are catering to changes in consumer demand, others remain focused on their physical market presence,” the SNL report stated. “Overall, however, institutions continue to use their traditional bank-customer relationship, from generating new customers to offering more personalized products.”

For example, SNL reported Huntington Bank is opening branches in moderate population regions because “its in-store interactive strategy continues to generate new business.”

What’s more, even though Bank of America tops the list of branch closings in moderate population areas, it has increased its branch concentration from 22% to 23.6% in high-population density markets, according to SNL.